Aldes Business Brokers

Summary

This franchise offers a good investment with low fixed franchise fees. The business is easy, fast and offers clients a wide variety of foods.The business will suit an "energetic" and driven person with a passion for challenges & rewards!

1. History Background

Fully describe the business's activities?

This Franchise fast food outlet is well known for the preparing and making of hamburgers and other fast food's. Their" motto " is to treat their customers with service excellence!The staff is fully trained in their respective positions and to handle each client with care & friendliness.The business is well located in a residential area surrounded by schools, supermarkets , bottle stores , local pub & other small businesses that attract feet to the centre.The business "delivery service " has not been fully promoted.This could serve as a" convenience product " as many people are of the working class and time is always a factor. Monthly Franchise Royalties flat fee of R3000.Joining Fee of R30 000 including Vat.

How long has the business been established?

The Franchise began in 1982 and existed only in the East Rand of Gauteng.The franchisee opened this particular store six(6) months ago. He owns the same franchise in Witbank for the past fourteen(14) months.

How long has the owner had the business?

The current owner started the business in June 2011.

2. Present Market

How does the business operate on a daily basis?

The business operates as a "normal fast foods" whereby clients walk in and order from the menu over the counter or by telephone orders. The portion sizes are large and therefore great value for your money's worth.

What Advertising/Marketing is carried out?

Advertising as follows: 1.Advertisements are placed on a regular basis in the local newspaper. 2.The owner makes use of the local radio station ( Radio Kragbron). 3.The schools newspaper advertises the daily/weekly specials. 4.The business makes use of advertising in the Telefinder (a local business telephone directory) 5.Menu's and flyers are printed on a large scale and dropped into personal & home postboxes on a regular basis.

Does the business have any contract work?

There are no signed contracts , only verbal agreements with businesses at the moment BUT there are small businesses that order large amounts of take-aways on a regular basis for lunches.The School Tuck Shops in the area are also selling the Franchise's fast foods.

What competition exists?

Not much competition within walking distance.The business can perform at higher turnovers due to its location and with more owner management control on a daily basis.The closest franchise fast food would be in town (7km )away.The local pub's clientele can support the business with regards to "fast foods" as the pub has no kitchen.

What are the seasonal trends?

Seasonal trends in the industry would be : 1.During winter months busy during the early evenings. 2.Summer days are busy during later evenings. 3.School holidays periods are busy with school children at home with a huge appetite for fast foods.

3. Financial

Is the business VAT Registered?

Applications have been filed with SARS.Bookkeeper to follow up & give feedback.

Are there up-to-date Management Accounts available?

The documentation is on file with the accountant and will be available on request.

What Balance Sheet and Income Statements are available?

The documentation is on file with the accountant and will be available on request to serious buyers only.

What percentage of the business is cash/credit?

This is a 100% cash business.

How could the profitability of the business be improved?

Profitability can be improved by: 1.Promoting the delivery service. 2.Obtaining contract work with other schools, old age homes, guest houses. 3.Preparing lunch and evening meals for collection or delivery in the residential area. 4.Marketing and promoting specials! 5.Catering snacks for functions & for the local pub in the area.

Is Seller finance available and for what amount?

Seller finance is NOT available for this business.

4. Staffing

Give a breakdown of staff/functions/length of service?

9 Staff Members 2x Griller's with a salary of R2800-00 each. 1x chipper with a salary of R2350-00. 2x kitchen ladies (preparing salads and rolls) @ R2350 each 1x lady co-ordinator with a salary of R2800-00. 1x lady in the scullery earning R2350-00 1x lady baking Pizza and she fries the fresh potato chips @ R2350 1x Cashier with a salary of R2650-00. All the staff has been employed for six (6) months except the cashier.She has only been employed for one(1) and a half months.All the staff have been fully trained in every department of the business.Staff rotation !!!

Do any receive special perks or incentives?

There are no incentives or perks. Staff receive a " one" week salary in December as a Christmas bonus. All staff are on contract. NO UNIONS

Do any have management potential?

The Griller has potential for management.

How involved is the Owner in running the business?

The owner is a firm believer in an "owner operated" business.Success depends on everyday presence and control of the business, staff, food costing & food preparations. The owner has two (2) branches and cannot be fully present in both , hence he feels it is time to pass the business on to someone local that can take the business to new heights!

5. Premises

When does the current lease end?

The current lease is three (3) years and ends June 2014

Is there an option of renewal & what period?

Yes. Option for renewal is available for the new owner and the period is dependant on the new owner of the Franchise.

What is the annual escalation %?

The annual escalation is @ 9% per annum.

What are the trading hours?

Trading hours : Monday to Saturday : 10am to 9pm Sundays from : 11am to 8pm.

What is the square meters of the business?

118 square meters

Do you require a licence?

Yes. A local municipality business license is required for this Franchise. The health inspector will visit the premises for: "hygiene , staff attire & food preparations areas" Fire exits and fire extinguishers.

What lease deposit and/or other surety is required?

One months key deposit in advance is required. One months current rental.

6. Assets

Is a full asset list on file?

A full asset list is on file.All assets are in working order.

Are any items not included in the sale?

None

What is their overall condition?

All fridges and grillers are 6 months old and are still in very good working order.

Do any require repairing?

None at this stage. Maintenance is constant due to the fridges and equipment used in the business.

Are they presently insured?

Yes.

7. S.W.O.T. Analysis

Strengths?

Strengths : 1. Depends on the service, product and quality. 2.Franchise Fees are low , monthly fee of R3000pm. 3.Variety of products 4.Location in residential area & nearby sports bar & other amenities.

Weaknesses?

Weakness: Lies with mismanagement and lack of system controls in the business.

Opportunities?

Opportunity: 1.Owner has the first (1st) option to open another Franchise near the "upcoming mall" in Middelburg 2.To introduce a delivery service for the surrounding suburbs. 3.Contracts can be put in place with the Mines and other small businesses in the surrounding areas.

Threats?

Threats: 1. The economy poses a threat but can also benefit in certain aspects. 2. Due to our rushed and fast paced lifestyles, convenience foods are becoming more and more a necessity in certain homes.

8. Reason For Sale

What is the reason for the sale?

The owner views Business as a growing opportunity for entrepeneurs.He builds the business from scratch , invest monies into the business & then resells to someone with skills to operate the business as a "going concern".

9. Conclusion

What is the price plus stock and the net profit?

The price is R500 000 including stock of R40 000 & Assets. Joining Fees are :R30 000 including Vat. Franchise training for two weeks on site or at head office.